Depression Odds: Above 50%

One of the best-performing securities we’ve seen? The Intrade contract for the economy to go into a depression in 2009. Last time we checked, bettors gave just a 25% chance of the economy shrinking by at least 10% this year. Now: 52.5%.

Meanwhile, we have a theory as to why so many folks like us and Megan McArdle and Tyler Cowen are already using the d-word, rather than the r-word to describe the current situation. Basically, it’s a way of optimistically telling ourselves that we’re at the bottom. In other words, we’re just kidding ourselves.